December 2019 Newsletter

Please click on the following link to view our monthly accounting/tax newsletter for December 2019:

December – 2019

We would like to highlight the following articles in this month’s newsletter:-

ATO debts may affect your credit rating – The ATO now has another “stick” in its arsenal to get businesses to engage with it and manage outstanding tax debts. Laws have recently been passed that allow the ATO to disclose the details of the tax debts of a business to credit ratings agencies. This could potentially affect the ability of the business to obtain finance or refinance existing debt. Generally, only businesses with a debt over $100,000 that are not “effectively engaged” with the ATO will be affected.

Crowdfunding: is it income? – Crowdfunding is when an individual or business (the promoter) uploads a description of a campaign (e.g. to fund an activity, a project or a new invention) along with the amount they want to raise to a third-party internet platform such as Kickstarter, GoFundMe, Indiegogo or Pozible. Other people (the contributors) can then choose to support the campaign or cause by pledging money. Campaigns on various platforms range from lavish weddings/honeymoons to ground-breaking new innovative products, and whether each campaign is taxable depends entirely on the circumstances of each case. Generally, if the campaign is related to running/furthering your business or is a profit-making plan, then any money received would be classified as income.

Conversely, if you are a “contributor” to a campaign you will only be able to deduct your “donation” if the crowdfunding campaign is endorsed or legislated as a deductible gift recipient. An exception applies if you carry on a business and there is a nexus between the cost of contributing to the campaign and your business income.

Please do not hesitate to contact us if you have any queries in relation to your tax and accounting matters.